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Interpretation Response #PI-20-0003


Below is the interpretation response detail and a list of regulations sections applicable to this response.

Interpretation Response Details

Response Publish Date: 04-07-2020
Company Name: Counsel for Markwest    Individual Name: Mr. Keith J. Coyle
Location state: DC    Country: US

View the Interpretation Document


Response text:

Mr. Keith J. Coyle
Babst, Calland, Clements and Zomnir, P.C.
Counsel for MarkWest
505 9th Street, NW, Suite 700
Washington, DC 20004

Dear Mr. Coyle:

In a letter to the Pipeline and Hazardous Materials Safety Administration (PHMSA), dated December 13, 2019, you provided supplemental information related to eight pipelines that transport off-gas from refineries to a natural gas processing plant (Javelin processing plant) located in Corpus Christi, Texas (MarkWest Javelin RG pipeline system). You provided the supplemental information in support of MarkWest's request that PHMSA reconsider a letter of interpretation dated October 15, 2019 (Interpretation), which stated that the eight pipelines at issue are transmission pipelines under Part 192. PHMSA's Interpretation was issued in response to MarkWest's request for interpretation dated October 10, 2016.

You stated MarkWest is requesting that PHMSA reconsider its Interpretation for the following reasons: (1) PHMSA has previously found that pipelines transporting gas from non-traditional sources of production can qualify as gathering lines under Part 192; and (2) PHMSA should clarify whether a gas processing plant that extracts natural gas liquids and removes other impurities to create pipeline quality gas should be treated as a large volume customer for purposes of the transmission line definition.

With regard to the first item, you stated that while the definition of onshore gas gathering line in Part 192 is typically applied to traditional oil and gas operations, PHMSA has acknowledged in prior interpretations that the definition applies to landfill gas systems. Therefore, you suggested that PHMSA should apply those same principles in determining whether a pipeline that transports off-gas from a refinery to a processing plant is an onshore gathering line. You requested PHMSA agree that the MarkWest Javelin RG pipeline system are onshore gas gathering lines.

Conventional natural gas is produced by a well drilled into a geologic formation in which the reservoir characteristics permit the natural gas to readily flow to the wellbore. Although landfill gas is produced by means that do not meet the criteria for conventional production, the gas is still produced from the landfill ground and the production of gas from a landfill is clearly a gathering process. MarkWest's system processes gas downstream from a Part 195 regulated pipeline in refineries and then transports the off-gas downstream from the refineries through the MarkWest Javelin RG pipeline system to the Javelin processing plant in Corpus Christi, Texas. The gas does not originate from a gas or oil production facility and no gathering of gas is performed with the pipelines between the refineries and the processing plant. Therefore, PHMSA does not find the pipelines meet the § 192.3 definition of gathering line.

Your second question is whether a gas processing plant that extracts natural gas liquids and removes other impurities to create pipeline quality gas should be treated as a large volume customer for purposes of the transmission line definition. The refineries receive crude oil from upstream Part 195 regulated pipelines. Refined products exiting (downstream) the refineries are also transported by Part 195 regulated pipelines. In this case, the refineries send the off-gas through pipelines to a downstream facility. The gas processing plant produces approximately 28,000 bbl/day of liquid hydrocarbons and 32 mmscfd of hydrogen. Also, the gas processing plant uses the off-gas as chemical and plastic feedstocks and sends residue gas back to the refineries. Per definitions under § 192.3, the pipelines from the refineries to the processing plant are neither gathering lines nor distribution lines. Therefore, PHMSA disagrees with Markwest's assertion that the Corpus Christi processing plant cannot be considered a large volume customer for purposes of the transmission line definition in § 192.3. Similarly, PHMSA does not agree that such a finding will implicate other midstream processing plants that do not receive gas from a refinery as opposed to a production facility (conventional or otherwise). Since the pipelines do not meet the definition of a gathering line, are not downstream from a gas distribution system and serve a single processing plant (large volume customer ), the pipelines meet the § 192.3 definition of a transmission line.

In conclusion, after examining your latest request, PHMSA has determined that its October 15, 2019, response to MarkWest's original request is correct. That is, the pipelines from the refineries to the processing plant (the MarkWest Javelin RG pipeline system) are transmission lines as well as any pipelines from the processing plant to the refineries.

If we can be of further assistance, please contact Tewabe Asebe at 202-366-5523.

Sincerely,

John A. Gale
Director, Office of Standards
and Rulemaking

 


Regulation Sections

Section Subject
§ 192.3 Definitions